Modi calls for expansion of trade with Iran in bilateral with Pezeshkian, amid US sanctions & threats
The Prime Minister and the President of Iran met on the margins of the Shanghai Cooperation Organisation (SCO) Summit in Bishkek, Kyrgyzstan, on August 31, 2026 — their first in-person engagement since the West Asia conflict earlier in the year.
The roughly 30-minute meeting focused on expanding and diversifying the bilateral trade basket between the two countries.
Discussions also covered regional developments in West Asia, with an emphasis on dialogue-based resolution, freedom of navigation for merchant shipping, and safety of seafarers amid heightened tensions around the Strait of Hormuz.
The Chabahar port, a long-standing India-Iran connectivity project, reportedly did not feature in the discussions.
An invitation was extended for the Iranian President to visit New Delhi for the upcoming BRICS Summit.
The meeting took place against the backdrop of renewed US economic pressure on Iran, including threatened sanctions against countries continuing trade engagement with Tehran.
Shanghai Cooperation Organisation (SCO)
The SCO is a Eurasian political, economic, and security grouping formally established on June 15, 2001, in Shanghai, evolving from the "Shanghai Five" (China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan) formed in 1996. Its Secretariat is headquartered in Beijing. India and Pakistan were admitted as full members in 2017, expanding the bloc beyond Central Asia into South Asia.
The Modi-Pezeshkian meeting took place on the sidelines of this SCO summit, illustrating how the grouping — which includes both India and Iran as members — provides a diplomatic venue for bilateral engagement even amid regional tensions and third-country sanctions pressure.
Chabahar Port and India-Iran Connectivity
Chabahar, on Iran's southeastern coast, is India's flagship connectivity investment in Iran, intended to give India sea access to Afghanistan and Central Asia bypassing Pakistan, and to link into the International North-South Transport Corridor (INSTC). India signed a long-term (10-year) contract in 2024 to operate the Shahid Beheshti terminal at the port through India Ports Global Limited.
Key Details
- Chabahar development traces to a trilateral India-Iran-Afghanistan agreement of 2003, followed by a bilateral pact in 2016 during a prime ministerial visit to Iran.
- Chabahar is envisaged as a key node on the INSTC, a multi-mode transport corridor connecting India to Russia and Central Asia via Iran, established via a 2000 agreement between India, Iran, and Russia.
- The port has faced intermittent friction with US sanctions regimes on Iran, though it has at times received sanctions waivers given its Afghanistan-humanitarian relevance.
Chabahar's conspicuous absence from the agenda of this high-level meeting is itself a notable data point — it signals continued sensitivity of the port project to the current US sanctions environment, a recurring theme examiners use to test students' grasp of how sanctions regimes constrain India's connectivity diplomacy.
Strait of Hormuz and Maritime Chokepoints
The Strait of Hormuz is a narrow strait between Iran and Oman connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea, through which a very large share of the world's seaborne crude oil and LNG exports transit. It is a classic "chokepoint" in global energy geography and a recurring flashpoint in Iran-West tensions.
The Prime Minister's emphasis on freedom of navigation and seafarer safety reflects India's stake in unimpeded Hormuz transit, especially given reports of Iranian control measures over shipping in the strait following the West Asia conflict.
- SCO 2026 Summit Heads of State meeting held in Bishkek, Kyrgyzstan, August 31–September 1, 2026.
- SCO is now a 10-member bloc: China, Russia, India, Pakistan, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Iran, Belarus.
- India-Iran meeting duration reported at approximately 30 minutes.
- India signed a 10-year contract to operate the Chabahar (Shahid Beheshti) terminal in 2024.
- Upcoming BRICS Summit in New Delhi cited as the next planned venue for engagement between the two leaders.